GM6 Intro to Fixed Income

What is the coupon of a bond?

• The market price of the bond

• The maturity date of the bond

• The face value of the bond

• The interest rate paid by the bond issuer

What is the maturity date of a bond?

• The date when the bond issuer sells the bonds

• The date when the bondholder can convert the bond into stock

• The date when the bond issuer will pay the bondholder the face value of the bond

• The date when the bondholder can sell the bond back to the company

What does a bond's yield refer to?

• The coupon rate generated on a stock investment

• The coupon rate generated on a fixed-income investment

• The expected earnings generated on a fixed-income investment

• The expected earnings generated on a commodity investment

Answer explanation

What is the primary market for bonds?

• Where government bond yields are measured

• Where bonds are introduced to the market to raise capital

• Where bond prices increase

• Where bonds are traded between investors

What is the secondary market for bonds?

• Where bond prices increase

• Where bonds are introduced to the market to raise capital

• Where bonds are traded between investors

• Where government bond yields are measured

Which of the following is the highest Moody's credit rating for junk bonds?

• Baa2

• BB+

• Ca

• Ba1

Answer explanation